Reconciliation of Accounts is an essential part of any business financial management. As part of the management process, it ensures that accounts are secure and protected against discrepancies and irregularities. In addition, an account reconciliation performed regularly facilitates the identification of accounting flaws and systematic tracking of a company's cash flow.

Reconciliation of accounts is a tedious task for small business owners. Therefore, this article will entail the importance and reasons for regularly doing reconciliation.

Early Intervention

It helps you stay on top of your corporate taxes by reconciling accounts each month. The correction will likely be a quick fix rather than a complicated puzzle that must be solved months after the event. Any concerns you may have, let your accountant know right away.


Unauthorized Payments

It's never fun when money is irrelevantly deducted from your account, but again, it's always better to spot the problem before a loss. For example, are you familiar with where your business checks go (and why)? Do you have an unauthorized vendor listed on your list? Cross-checking these payments will ensure no unnecessary withdrawals from the company.


Overdue Invoices

Keeping up with customers' payments is a good habit for business owners, but it's good to check that all checks are cleared. Bouncing checks can pose a problem as far out as a month, so it's always better to catch them as quickly as possible so you can address them immediately. Almost everything gets harder to correct as it ages.


Bank Errors

Reconciling bank accounts is beneficial because it informs you of any errors in your finances. Incorrect or missing deposits can quickly get you into trouble. Typically, when you see an account showing a different balance to what your bank has either reported, it shows inaccuracy or miscalculation. You may also want to keep an eye out for service fees from your bank or late credit card payments during the reconciliation process.

Final words

While many business owners can handle their reconciliations each month, others prefer to leave the process to a bookkeeper or other accounting professional. However, professionals are always better suited to handle account reconciliation. You can also receive KPI reports from professionals to better your company's growth.